ENABLES IT GROUP PLC – Final Results.
22 February 2013 Enables IT Group plc ("Enables" or "the Company") (formerly Nexus Management Plc) Final results for the year ended 30 September 2012
The Board of Enables IT Group plc, the AIM quoted provider of
network and IT solutions, is pleased to announce its final results for
the year ended 30
– Adjusting for the
– Turnover increased by [pounds sterling]148,000 to [pounds
sterling]4.27 million (2011: [pounds sterling]4.12 million)
– Operating profits (before exceptional items) increased by [pounds
sterling]70,000 to [pounds sterling]352,000 (2011: [pounds
– Disposal of US
– Nexus Management Plc completes acquisition of Enables IT Limited
by way of
[Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God’s presence.
Walliss, Chief Executive Officer, commented:
"These results reflect the position of the group prior to the successful acquisition of Enables IT. The integration of the two businesses has been a key focus in the last few months and I am delighted with the progress we have made and thank all those involved. We look forward to completing the integration phase and implementing our growth strategy, which subject to stable market conditions, should deliver strong improvements in the group's returns in 2013 and beyond."
This announcement has been extracted from the accounts. The full
Report and Accounts can be found on the Enables website at
FURTHER ENQUIRIES Enables IT Group plc Michael Walliss Tel: 01372 455 970 Merchant Securities Limited (Nominated Adviser) Simon Clements / David Worlidge Tel: 020 7628 2200 Peterhouse Corporate Finance (Broker) Jon Levinson Tel: 020 7562 3351
NON-EXECUTIVE CHAIRMAN’S STATEMENT
I am pleased to announce a small increase in revenue compared with
the previous year during this challenging period, with a larger increase
in operating profits before exceptional items
Because of; on account of:
prep → ,
throughout the Group. As previously announced the Board
carried out a strategic review resulting in a number of changes to the
existing Board and the appointment of a new Executive Director – Michael
During the year, following a review of all the trading activities,
it was decided
to dispose of
the US operating subsidiary Resilience
Technology Corporation (RTC) to allow the Group to
on core IT
Services. The disposal also removed certain liabilities and reduced
exposure to long standing creditors. The acquirers were the RTC
management team and the deal completed in the summer of 2012.
Focus was then directed towards the completion of the reverse takeover of Enables IT Limited, of which Michael Walliss was the majority shareholder and Managing Director. It was considered a good strategic fit with the current group and management team and brought high level technical skills which are expected to assist in strong future growth.
Finally, I would like to thank the management team and all staff for
their continued support and we look forward to the year ahead.
M Barney Battles Non-Executive Chairman
CHIEF EXECUTIVE OFFICER’S STATEMENT
Although I was appointed CEO on the conclusion of the successful reverse takeover at the end of November 2012, I formally joined the Board at the beginning of July 2012 as an Executive Director. This allowed me to review the company performance and the group structure both here in the UK and in the US in readiness for the takeover transaction. We identified a number of challenges that needed immediate attention within the group structure, particularly around the commercial arrangements of managed service contracts, the data centre offering (colocation and cloud services) and staff performance. Additionally, the structure of the data centre in the US needed some upgrades to the environment to ensure we could deal with the current load on the facility with power and cooling. The cloud platform needed further technical design and investment to optimise performance and de-risk outages ensuring our customer's business needs could be met. Happily most of these areas have been dealt with and I am pleased to say both management teams in the UK and US are performing well since this initial review. One of the reasons for wanting to undertake the reverse takeover was to have the opportunity to raise funds to help us undertake a number of strategic acquisitions. The investment will help us accelerate a full service offering, enhancing the group's technical capabilities and attract new larger corporate customers. This will strengthen the business and minimise our reliance on a small number of existing large customers, and through delivery of increased profits, will create real value for our shareholders.
Review of Activities
Following on from the successful takeover, we ended the year by relocating our head office and operation facility to a newly developed building in Leatherhead, Surrey. Having worked on this facility designing the layout and the structure to a budget that was set at the end of May last year, I am very pleased to say the facility is what we hoped and expected. The centre has been designed to ensure we can deliver all our helpdesk and technical services from one location in the UK. As we move forward and continue the integration with our US managed service, both operations will allow us to offer a fully 24/7 global support managed service desk and technical implementation skills that will be able to compete with the best in our industry. The UK operational centre has growth capability to allow us to quadruple the size of our managed service desk and double our professional services and project management teams along with a technical benching testing and development room for our customers to see their future technology in action. With the operational and head office function established in Surrey, we decided to maintain the previous head office facility in Moorgate, London to continue the development of our Sales and Marketing team. The team has been operational from this facility since the beginning of January 2013 and initial focus will be on brand alignment and enhancing awareness, strengthening customer relationships across the group and attracting new opportunities and customers. Whilst we anticipate current market conditions will be challenging, we are committed to ensure organic growth is continued and deal with the opportunities that will come from our anticipated acquisitions. Following on from the takeover transaction we have changed a number of roles within the business and also created a few new ones to ensure the company structure continues to be effective and positioned to deal with future growth. This is well advanced and continues to deliver the efficiencies that were identified in advance of the takeover. In the last six months we have strengthened our US data centre by further investment in our cloud platform 'HAVEN', and are seeing further good growth by new and existing US customers. Our focus is to change previous arrangements by using the majority of HAVEN as colocation and transferring the data centre to a fully cloud platform offering. We believe this will not only be financially beneficial to existing and new customers, but will offer up to 100% uptime and present a solution to changing data storage compliance. To compliment this offering and having already launched our UK Cloud platform in November 2012 through our Tier 1 Partner in London, our focus and future development will be to have both data centre platforms fully replicated.
this strategy we now have
n a process of formal recognition of a school or institution attesting to the required ability and performance in an area of education, training, or practice.
leading technology partners with
aggregation of minute particles of water or ice suspended in the air.
Formation of Clouds
Clouds are formed when air containing water vapor is cooled below a critical temperature called the dew point and the resulting moisture condenses into
(Network and Security), Good (
BYOD Bring Your Own Dessert
BYOD Buy Your Own Drinks
– Secure Mobility solutions), Meru
(Wireless Infrastructure), to name but a few.
As reported by the Chairman, during the year the group
v. dis·posed, dis·pos·ing, dis·pos·es
1. To place or set in a particular order; arrange.
Resilience Technology Corporation (RTC), therefore the operating
financial statements only reflect the continuing group operations and
not RTC which is shown as a
A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations.
The turnover increased by [pounds sterling]148,000 (3.6%) to [pounds
sterling]4.3m with operating profits (before exceptional items) growing
by 25% to [pounds sterling]352,000.
As shown in note 5 exceptional items were made up of two main contributing factors. The reconstruction of the Board accounted for [pounds sterling]264,000 (including compromise agreements and associated legal fees), and the acquisition costs relating to Enables IT Limited. Excluding these main exceptional items and the profit from discontinued operations ([pounds sterling]163,000), the stated loss before taxation of [pounds sterling]103,000 would have resulted in a net profit before taxation of [pounds sterling]263,000 (6%). The company generated [pounds sterling]378,000 of cash during the year of which [pounds sterling]262,000 was generated from operating activities.
Whilst the majority of the trading year was spent on restructuring
the group and board changes, the Group’s operations continued to
trade in line with management expectations.
The consolidation of the Group is nearing completion and is expected to be finalised by the end of March 2013 enhancing the Group's service capabilities. The full integration of both the US and UK Managed Service Desk offering a true world-wide dedicated 24/7 support and monitoring service. This will not only strengthen the Group's profitability by driving up efficiencies, but will allow the group marketing opportunities to a wider audience due to better in house capabilities with dedicated resource.
To support the development of the Group the Board continues to look
to strengthen our Sales and Marketing department by the
1. the gradual increase to a maximum in a reflex when a stimulus of unaltered intensity is prolonged.
As part of the reverse takeover strategy we are committed to not
only growing our business organically, but through selective
acquisitions both in the UK and US. The implementation of this strategy
is already well advanced.
In addition to this, we continue to work closely with one of our
major client’s to conclude a longer term contractual situation that
will be beneficial to them and to the Group. The reliance on this one
customer has now been significantly reduced following the successful
Trading for the current financial year has started well considering
the integration process and is in line with management’s
Michael Walliss Chief Executive Officer GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 SEPTEMBER 2012 30 30 September September 2012 2011 [pounds sterling] (Restated) [pounds sterling] Continuing operations Notes Revenue 4 4,273,614 4,125,434 Cost of sales (2,381,454) (2,261,130) Gross profit 1,892,160 1,864,304 Operating expenses excluding exceptional expenses (1,540,236) (1,582,669) Operating profit before exceptional items 351,924 281,635 Exceptional items 5 (554,931) (16,705) Operating (loss)/profit (203,007) 264,930 Finance costs 6 (62,470) (96,244) (Loss)/profit before tax (265,477) 168,686 Tax 7 - - (Loss)/profit for the year from continuing operations (265,477)
Discontinued operations Profit/(loss) for the year from discontinued operations 162,945 (283,172) Loss for the year (102,532) (114,486) Attributable to equity holders of the parent (102,532) (114,486) Loss per share Basic and diluted 8 (0.0087)p (0.0102)p Continuing operations basic and diluted 8 (0.0087)p (0.0102)p
v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies
1. To be or go with as a companion.
accounting policies and notes form an integral part
of these financial statements.
STATEMENT OF CHANGES IN EQUITY
TO THE EQUITY
SHAREHOLDERS OF THE PARENT FOR THE YEAR ENDED 30 SEPTEMBER 2012
Share Foreign Share Share premium Retained exchange Other options Group capital account earnings reserve reserve reserve Total [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] As at 1 October 2010 2,748,738 5,029,843 (8,537,778) (99,595) 38,876 944,398 124,482 Loss for the year - - (114,486) - - - (114,486) Movement in the year - - - (20,424) - - (20,424) Shares issued 107,142 42,857 - - - - 149,999 Convertible loan notes - - - - - - - Share based payment charge - - - - - 26,681 26,681 As at 30 September 2011 2,855,880 5,072,700 (8,652,264) (120,019) 38,876 971,079
As at 1 October 2011 2,855,880 5,072,700 (8,652,264) (120,019) 38,876 971,079 166,252 Loss for the year - - (102,532) - - - (102,532) Movement in the year - - - 5,921 - - 5,921 Shares issued 93,750 56,250 - - - - 150,000 Convertible loan notes - - - - - - - Share based payment charge - - - - - 1,795 1,795 As at 30 September 2012 2,949,630 5,128,950 (8,754,796) (114,098) 38,876 972,874 221,436
GROUP BALANCE SHEET AS AT 30 SEPTEMBER 2012
30 30 September September 2012 2011 [pounds sterling] [pounds sterling] ASSETS Notes Non-current assets Property, plant and equipment 9 255,789 309,660 Intangible assets 11 - 633,910 Goodwill 10 - 668,810 255,789 1,612,380 Current assets Inventories 13 - 412,941 Trade and other receivables 14 294,844 410,976 Cash and cash equivalents 787,238 409,391 1,082,082 1,233,308 Total assets 1,337,871 2,845,688 LIABILITIES Current liabilities Trade and other payables 15 (698,961) (1,752,623) Loans and other borrowings 16 - (206,362) Obligations under finance leases 17 (41,263) (61,806) (740,224) (2,020,791) Non-current liabilities Trade and other payables 15 - (68,688) Loans and other borrowings 16 (355,293) (529,761) Obligations under finance leases 17 (20,918) (60,196) (376,211) (658,645) Total liabilities (1,116,435) (2,679,436) Total assets less liabilities 221,436 166,252 EQUITY Shareholders' equity Called up share capital 18 2,949,630 2,855,880 Share premium 5,128,950 5,072,700 Other reserves 897,652 889,936 Retained earnings (8,754,796) (8,652,264)
Total equity attributable to the equity holders of the parent
GROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 30 SEPTEMBER 2012
30 30 September September 2012 2011 [pounds sterling] [pounds sterling] CONTINUING OPERATIONS Cash flows from operating activities Loss before tax (102,532) (114,486) Adjustments for: Interest paid 171,258 240,494 Amortisation of customer list 38,477 271,619 Profit on disposal of subsidiary (33,630) - Depreciation 93,840 111,170 Currency exchange adjustment (3,512) (31,113) Operating cash flows before movements in working capital 163,901 477,684 Share option costs 1,795 26,681 Increase in inventories (896) (36,659) Decrease in trade and other receivables 47,226 42,679
Decrease in provisions for liabilities and charges – (64,143)
Increase/(decrease) in trade and other payables 221,055 (48,841) Cash
generated from operations
433,081 397,401 Interest paid (171,258) (240,494)
Net cash generated from operating activities 261,823 156,907
Investing activities Interest received
- - Acquisition of goodwill - - Proceeds from disposal of subsidiary 468,946 - Legal costs on disposal of subsidiary (11,359) -
Purchases of property, plant and equipment (54,981) (36,974) Net
cash generated from/(used in) investing activities
402,606 (36,974) Financing activities Proceeds from issue of share capital 93,750 107,142 Premium on issue 56,250 42,857 Decrease in borrowings (375,245) (172,441)
of obligations under finance lease (61,337) (68,933) Net
cash used in financing activities
Net cash generated from
Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the
DISCONTINUED OPERATIONS Net cash from investing activities - - Net cash from discontinuing operations - - Net increase in cash and cash equivalents 377,847 28,558
Cash and cash equivalents at beginning of year 409,391 380,833
Cash and cash equivalents at end of year 787,238 409,391
Disposal of Resilience Technology Corporation
During the year, the group disposed of the subsidiary Resilience Technology Corporation. The proceeds are as follows: [pounds sterling] Total sales proceeds 500,000
Less: cash of Resilience disposed (31,054)
AT 30 SEPTEMBER 2012
The financial year represents the year ended 30 September 2012
(prior financial year ended 30 September 2011). The
for the year ended 30 September 2012
financial statements of the Company and its subsidiaries
1. GOING CONCERN
As set out on page 22, the Group recorded a loss of [pounds sterling]102,532 including an operating profit on existing businesses (before restructuring costs and finance costs) of [pounds sterling]351,924. The steps that the Directors have taken have returned the Group to profitability and they are confident the Group is able to generate positive cash flow from operations going forward, especially taking into account the acquisition of Enables IT Limited since the year end.
The Directors therefore believe that the Group has adequate
resources to continue in operational existence in the
tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees
To see or know beforehand:
and as such have prepared the financial statements on the going concern
2. PRINCIPAL ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have been
consistently applied to all years presented, unless otherwise
Basis of accounting
The financial statements have been prepared in
International Financial Reporting Standards
IFRS Inter Frame Relay Service
IFRS Indiana Facilities Registry System
) and the Companies Act 2006 applicable to
companies reporting under IFRS. The financial statements have been
prepared under the historical cost convention.
Judgements and estimates
The Group makes judgements and assumptions concerning the future
that impact the application of policies and reported amounts. The
resulting accounting estimates calculated using these judgements and
assumptions will, by definition, seldom equal the related actual results
but are based on historical experience and expectations of future
events. The judgements and key sources of
have a significant effect on the amounts recognised in the financial
statements are discussed below.
The Group is required to assess whether goodwill has suffered any impairment loss, based on the recoverable amount of its cash generating units (CGUs). The recoverable amounts of the CGUs have been determined based on value in use calculations and these calculations require the use of estimates in relation to future cash flows and suitable discount rates. Actual outcomes could vary from these estimates.
Impairment of assets
Financial and non-financial assets including other
, or one that is lacking physical existence, such as good will.
subject to impairment reviews based on whether current or future events
suggest that their recoverable amount may be less than
. Recoverable amount is based on a calculation of
which includes management assumptions and
estimates of future performance.
If there is an indication that impairment exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which this asset belongs. An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of the fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of the future cash flows have not been adjusted.
If the recoverable amount of an asset (or
CGU Claremont Graduate University
CGU Chang Gung University
CGU Canadian Geophysical Union
) is estimated to be
less than its carrying amount, the carrying amount of the asset (CGU) is
reduced to its recoverable amount. An impairment loss is recognised as
an expense immediately, unless the relevant asset is carried at a
revalued amount, in which case the impairment loss is treated as a
Where an impairment loss subsequently reverses, the carrying amount of the asset (CGU) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (CGU) in prior years. A reversal of an impairment loss is recognised as income immediately unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. New standards adopted early
At the date of the authorisation of the financial statements, no
standards and interpretations, which are issued but not yet effective,
have been adopted early.
New standards and interpretations not yet adopted
At the date of the authorisation of the financial statements, the
following standards, and interpretations, which are issued but not yet
effective, have not been applied:
Effective for the Group for future financial years:
12 ‘Accounting for Taxes on Income (effective
date year beginning 1
Amendment to IAS 36 ‘Impairment of Assets’ (effective date
year beginning 1 January 2012)
Amendment to IAS 1 ‘Presentation of Financial Statements’
(effective date year beginning 1
Amendment to IFRS 1 ‘First-time Adoption of International
Financial Reporting Standards’ (effective date year beginning 1
Amendment to IFRS 7 ‘Financial Instruments: Disclosures’
(effective date year beginning 1 January 2013)
Re-issue of IFRS 9 ‘Financial Instruments’ (effective date
year beginning 1 January 2013)
Amendment to IFRS 10 ‘Consolidated Financial Statements’
(effective date year beginning 1 January 2013)
Amendment to IFRS 11 ‘Joint Arrangements’ (effective date
year beginning 1 January 2013)
Amendment to IFRS 12 ‘Disclosure of Interests in Other
Entities’ (effective date year beginning 1 January 2013)
IFRS 13 ‘Fair Value Measurement’ (effective date year
beginning 1 January 2013)
Amendment to IAS 1 ‘Presentation of Financial Statements’
(effective date year beginning 1 January 2013)
Amendment to IAS 16 ‘Property , Plant and Equipment’
(effective date year beginning 1 January 2013)
Amendment to IAS 19 ‘Employee Benefits’ (effective date
year beginning 1 January 2013)
Reissued IAS 27 ‘Separate Financial Statements’ (effective
date year beginning 1 January 2013)
Reissued IAS 28 ‘Investments in Associates and Joint
Ventures’ (effective date year beginning 1 January 2013)
Amendment to IAS 32 ‘Financial Instruments: Presentation’
(effective date year beginning 1 January 2013)
Amendment to IAS 34 ‘Interim Financial Reporting’
(effective date year beginning 1 January 2013)
IFRIC 20 ‘Stripping Costs in the Production Phase of a Surface
Mine’ (effective date year beginning 1 January 2013)
Amendment to IAS 32 ‘Financial Instruments: Presentation’
(effective date year beginning 1 January 2014)
Amendment to IFRS 7 ‘Financial Instruments: Disclosures’
(effective date year beginning 1 January 2015)
Amendment to IFRS 9 ‘Financial Instruments’ (effective
date year beginning 1 January 2015)
The Group has considered the above new standards, interpretations and amendments to published standards that are not yet effective and concluded that except for the amendments to IAS 1 'Presentation of Financial Statements' and IFRS 10 'Consolidated Financial Statements', they are either not relevant to the Group or that they would not have a significant impact on the Group's financial statements.
New standards adopted during the year
In the current period, the Group has adopted all of the new and
revised Standards and Interpretations issued by the International
Accountancy Standards Board (the
See International Accounting Standards Board (IASB).
) and the International Financial
Reporting Interpretations Committee (the IFRIC) of the IASB that are
relevant to its operations and effective for reporting dates beginning
Basis of consolidation
The Group accounts
the accounts of Enables IT Group plc
and all its subsidiary undertakings drawn up to 30 September each year.
No income statement is presented for Enables IT Group plc as permitted
by section 408 of the Companies Act 2006.
The results of any subsidiaries acquired during the year are included in the consolidated income statement from the date on which control is transferred to the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. They are deconsolidated from the date that control ceases. The acquisition of subsidiaries is accounted for using the purchase method. The cost of an acquisition is measured at the aggregate of the fair value, at the date of exchange, of assets given, liabilities incurred or assumed and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions under IFRS3 are recognised at their fair value at the acquisition date.
Goodwill arising on acquisition is recognised as an asset and
initially measured at cost, being the excess of the cost of the business
combination over the Group’s interest in the net fair value of the
identifiable assets, liabilities and
Where necessary, adjustments are made to the financial statements of
subsidiaries and associates to bring accounting policies used in line
with those used by the Group.
All intra-Group transactions, balances, income and expenses are
eliminated on consolidation.
Revenue is taken on fee income in the year to which it relates.
Project income is recognised in the year in which the project is worked
on. For projects which fall over the financial year end income is
recognised to reflect the partial performance of the contractual
The income from annual maintenance contracts is recognised in equal
instalments over the period to which the service is provided. The income
from product sales is recognised at the date of shipment.
Goodwill represents the excess of the cost of an acquisition over
the fair value of the Group’s share of the identifiable assets and
liabilities of the acquired subsidiary at the date of acquisition.
Goodwill is tested annually for impairment and carried at cost less
v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates
To gather or pile up; amass. See Synonyms at gather.
To mount up; increase.
impairment losses. (Any impairment charge is recognised in
the income statement in the year in which it occurs.) Impairment losses
on goodwill are not reversed. Gains and losses on the disposal of an
entity include the carrying amount of goodwill
relate prep →
relate prep → ,
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or Groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. Goodwill is allocated to cash-generating units that represent each business segment.
Impairment of property, plant and equipment and intangible
At each balance sheet date, the Group reviews the carrying amounts of its property, plant & equipment and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset, which is the higher of its fair value less costs to sell and its value in use, is estimated in order to determine the extent of the impairment loss. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Any impairment charge is recognised in the income statement in the
year in which it occurs for assets carried at cost if recoverable amount
is less than the carrying value. Where an impairment loss, other than an
impairment loss on goodwill, subsequently reverses due to a change in
the original estimate, the carrying amount of the asset is increased to
of its recoverable amount.
Available for sale investments are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date. Available for sale investments are initially recognised at fair value plus transaction costs. After initial recognition, available for sale investments are measured at fair value, with gains or losses recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in the income statement. The fair values of investments are based on current bid prices. If the market for an available for sale investment is not active the Group establishes fair value by using valuation techniques. These include the use of recent arm's length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs.
Property, plant and equipment
Property, plant and equipment assets are stated at cost less accumulated depreciation and impairment losses. Depreciation is calculated to write down their cost to their estimated residual values by equal annual instalments over the year of their estimated useful economic lives, which are considered to be: Fixtures & Fittings 3 years Office & Computer Equipment 3 years Short Leasehold Improvements Over the remaining term of the lease
Identifiable intangible assets are recognised when the Group controls the asset, it is probable that future economic benefits attributable to the asset will flow to the Group and the cost of the asset can be reliably measured. All intangible assets, other than goodwill and indefinite lived assets, are amortised over their useful economic life. The method of amortisation reflects the pattern in which the assets are expected to be consumed. If the pattern cannot be determined reliably, the straight line method is used.
Brand, trade names and customer lists acquired through business
combinations are recorded at fair value at the date of acquisition.
Assumptions are used in estimating the fair values of acquired
intangible assets. These include management’s estimates of revenue
and profits to be generated by the acquired business.
The estimated useful lives of intangible assets are:
Brands and trade names 10 years straight line
Customer lists 10 years straight line
The Group makes defined contributions to its employees’
personal plans. The pension costs charged in the financial statements
represents the contributions payable by the Group during the period.
Leased assets and obligations
Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards of ownership to the Group. All other leases are classified as operating leases. For property leases, the land and building elements are treated separately to determine the appropriate lease classification. Finance leases Assets funded through finance leases are capitalised as property, plant and equipment and depreciated over their estimated useful lives or the lease term, whichever is shorter. The amount capitalised is the lower of the fair value of the asset or the present value of the minimum lease payments during the lease term at the inception of the lease. The resulting lease obligations are included in liabilities determined. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance costs on finance leases are charged directly to the income statement. Operating leases
Assets leased under operating leases are not recorded on the balance
sheet. Rental payments are charged directly to the income statement on a
straight line basis over the lease term.
Transactions in foreign currencies are translated into Sterling using the exchange rates prevailing at the date of the transaction. Foreign exchange gains or losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the balance sheet date are recognised in the income statement. On consolidation, assets and liabilities of foreign undertakings are translated into Sterling using the year end exchange rates. The results of foreign undertakings are translated into Sterling at average rate of exchange for the year. Foreign exchange differences arising on retranslation are recognised directly in equity.
Current and deferred taxation
Current tax is the expected tax payable on taxable income for the
year, using tax rates enacted or
1. Substantial; considerable.
2. Independent in existence or function; not subordinate.
3. Not imaginary; actual; real.
enacted at the balance
sheet date, and any adjustments to tax payable in respect of previous
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the
of taxable profits (‘temporary differences’) and
is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable
temporary differences. Where there are taxable temporary differences
arising on subsidiaries, deferred tax liabilities are recognised.
Deferred tax assets are generally recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Where there are deductible temporary differences arising on subsidiaries, deferred tax assets are recognised only where it is probable that they will reverse in the foreseeable future and taxable profits will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
that sufficient tax profits will be available to allow all or
part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
Deferred tax is charged or credited to the income statement, except
when it relates to items charged or credited directly to equity, in
which case the deferred tax is also dealt with in equity.
Share based payments
The Group has applied the requirements of IFRS 2 ‘Share-Based
Payments’. In accordance with the transitional provisions, IFRS 2
has been applied to all grants of equity instruments after 7
2002 that were unvested as of 1 January 2005.
The Group issues equity-settled share-based payments to certain employees, including share options with non-market based vesting conditions. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payment is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest.
Fair value is measured by use of a Black-Scholes model for the
majority of share options in issue. The expected life used in the model
has been adjusted, based on management’s best estimate, for the
effects of non-transferability, exercise restrictions, and
and financial liabilities are recognised on the
Group’s balance sheet when the Group has become party to the
contractual provisions of the instrument.
Trade and other
Trade receivables are stated at fair value. A provision for
impairment is made where there is objective evidence of impairment
(including customers in financial difficulty or seriously in default
against agreed payment terms). There is no material
carrying and fair values.
Inventories are valued at the lower of cost or net realisable value. The directors carry out an annual valuation of inventories. The cost of any inventories that are valued below the current book value is written off to the income statement. Cost is determined using the average cost basis.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at
call with banks, other short-term highly liquid investments with
original maturities of three months or less, and bank overdrafts. Bank
overdrafts are shown within borrowings in
Trade and other payables
Trade payables are recognised at fair value. There is no material
variance between book and fair values.
Bank loans and overdrafts are recorded initially at their fair value, net of direct transaction costs and finance charges are recognised in the income statement over the term of the instrument. Note 18 provides details of the applicable interest rates. There is no material variance between book and fair values. Equity instruments
Equity instruments are recorded at the proceeds received, net of
direct issue costs.
3. DISPOSAL OF SUBSIDIARY
During the year, the group disposed of Resilience Technology
Corporation. The details of the disposal are:
2012 Total [pounds sterling] [pounds sterling] Disposal proceeds 500,000 Net assets and liabilities disposed of Cash and cash equivalents 31,054 Fixed assets 5,675 Inventories 413,837 Trade and other receivables 87,642 Trade and other payables (1,362,143) 823,935 Goodwill and intangible assets written off (1,265,077) Legal costs (11,358) Exchange loss (13,870) Reported profit on disposal 33,630
4. BUSINESS AND
1. Of or relating to geography.
2. Concerning the topography of a specific region.
The segment reporting format is determined to be the geographical segments as the Group's risk and rates of return are affected predominately by the location of its customers. The Group has two main geographical segments, namely the USA and Europe.
The segment results for the year ended 30 September 2012 are as
Europe USA Inter-Group
v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates
1. To unite into one system or whole; combine:
trading operations nued operations Year ended 30 September 2012 [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] Revenue Segmental revenue - external 1,522,267 2,751,347 - 4,273,614 1,525,865 5,799,479 Segmental revenue - internal 191,834 - (191,834) - - - Total segmental revenue 1,714,101 2,751,347 (191,834) 4,273,614 1,525,865 5,799,479 Operating profit 307,830 44,094 - 351,924 275,169 627,093 Restructuring costs (263,552) - (263,552) Acquisition costs re Enables IT Limited (265,000) - (265,000) Amortisation of intangible assets - (38,477) (38,477) Share based payments (1,795) - (1,795) Foreign currency translation (24,584) 1,411 (23,173) Finance costs (62,470) (108,788) (171,258) Profit on disposal of subsidiary
– 33,630 33,630
(Loss)/profit for the year
(265,477) 162,945 (102,532)
Year ended 30 September 2011 Revenue Segmental revenue - external 1,444,386 2,681,048 - 4,125,434 1,777,704 5,903,138 Segmental revenue - internal 280,531 - (280,531) - - - Total segmental revenue 1,724,917 2,681,048 (280,531) 4,125,434 1,777,704 5,903,138 Operating profit 128,375 153,260 - 281,635 114,576 396,211 Amortisation of intangible assets - (271,619) (271,619) Share based payments (26,681) - (26,681) Foreign currency translation 9,976 18,121 28,097 Finance income - - - Finance costs (96,244) (144,250) (240,494) Loss for the year 168,686 (283,172) (114,486) Revenues from one customer of the Group amounted to more than 10% of the Group's total revenue. The total revenues from this customer are detailed below, by segment: 2012 2011 [pounds sterling] [pounds sterling] Revenue - Europe 746,110 723,980 Revenue - USA 1,402,737 1,421,490 2,148,847 2,145,470
1. pertaining to or forming a segment or a product of division, especially into serially arranged or nearly equal parts.
2. undergoing segmentation.
Analysis of the Balance Sheet
Europe USA Inter-Group
v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues
1. To stop doing or providing (something); end or abandon:
balances operations operations Year ended 30 September 2012 [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] Additions to non-current assets 2,659 47,343 - 50,002 4,979 54,981 Depreciation (6,597) (83,916) - (90,513) (3,327) (93,840) Impairment - - - - - - Amortisation - - - - (38,477) (38,477) Segment assets 1,826,152 394,522 (882,803) 1,337,871 - 1,337,871 Segment liabilities (1,400,970) (598,268) 882,803 (1,116,435) - (1,116,435)
Year ended 30 September 2011
Additions to non-current assets 3,448 33,526 - 36,974 - 36,974 Depreciation (6,397) (104,773) - (111,170) - (111,170) Impairment - - - - - - Amortisation - (271,619) - (271,619) - (271,619) Segment assets 3,205,488 2,275,652 (2,635,452) 2,845,688 - 2,845,688 Segment liabilities (1,109,676) (4,205,212) 2,635,452 (2,679,436) - (2,679,436)
5. EXPENSES AND AUDITOR’S
The Group’s results include charges/(credits) for the
2012 2011 Total Total [pounds sterling] [pounds sterling] Depreciation on tangible fixed assets owned 39,410
Depreciation on tangible fixed assets held under finance lease 51,103 70,261 Auditor's remuneration 44,000 44,750 Operating lease costs 137,327 201,044 Exceptional items: Share based payment 1,795 26,681 Restructuring costs 263,552 - Committed acquisition costs re Enables IT Limited 265,000
Net loss/(profit) on foreign currency translation 24,584 (9,976) Total Exceptional items 554,931 16,705
The loss attributable to the parent company profit and loss account
for the year was [pounds sterling]1,846,950 (2011: profit [pounds
The fees charged by the
can be further analysed under the
following headings for services rendered:
2012 2011 [pounds sterling] [pounds sterling] Audit services Fees payable to Company auditor for the audit of parent Company and consolidated accounts 14,000 15,500 Non-audit services Fees payable to the Company's auditor and its associates for other services: The audit of Company's subsidiaries pursuant to legislation 20,000 23,500 Tax compliance and advisory services 10,000 5,750 Fees relating to the acquisition of Enables IT Limited 60,000 - 104,000 44,750 6. NET FINANCE COSTS 2012 2011 [pounds sterling] [pounds sterling] Finance Expense Interest on finance lease 9,019 14,702 Interest on other borrowings 53,451 81,542 62,470 96,244 7. TAXATION 2012 2011 i) Current tax charge [pounds sterling] [pounds sterling] The tax charge comprises: UK taxation Corporation tax at 24.00% (2011: 27.00%) - -
Current - - - -
n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its
of temporary differences – –
ii) Tax reconciliation
The taxation expense on the loss for the year differs from the amount computed by applying the corporation tax rate to the loss before tax for the following reasons: 2012 2011 [pounds sterling] [pounds sterling] Loss on ordinary activities before tax (102,532)
Theoretical tax charge at 24.00% (2011: 27.00%) (24,607)
Effects of: Expenses (including goodwill) not deductible for tax 69,263 8,566 purposes Capital allowances less than depreciation 10,957 3,312 Other timing differences 38,913 Accounting profit on disposal (8,071) - Adjustments in respect of prior periods - Utilisation of tax losses (63,594) (52,023) Unrelieved losses c/f 16,052 32,143 Total tax charge for the year - -
Factors that may affect future tax charges
At 30 September 2012 the Group has tax losses of
1. Almost exact or correct:
[pounds sterling]560,808 (2011: [pounds sterling]2,112,463) to set
against future profits of the same trade.
A deferred tax asset of [pounds sterling]129,954 (2011: [pounds sterling]564,932) arising from the tax losses in place has not been recognised. Although the directors ultimately expect sufficient taxable profits to arise, there is currently insufficient evidence to support the recognition of a deferred tax asset in these financial statements. 8. LOSS PER SHARE Basic
Basic profit/(loss) per share is calculated by dividing the loss
attributable to equity holders of the Group by the weighted average
number of ordinary shares in issue during the year.
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.
2. To lessen the force, strength, purity, or brilliance of, especially by admixture.
The weighted average number of the Group's ordinary shares used in the calculation of diluted earnings per share has been adjusted for the effect of potentially dilutive share options granted under the Group's share option schemes. (Potentially dilutive share options are options with an exercise price less than the middle market price at 30 September 2012). 2012 2011 Loss Loss attributable Weighted attributable Weighted to equity average to equity average holders of Number of Loss holders of Number of Loss the parent shares per share the parent shares per share [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] Basic EPS calculation (102,532) 1,179,441,929 (0.000087) (114,486) 1,115,518,105 (0.000102) Effect of dilutive options 295,712,646 424,106,019
calculation (102,532) 1,475,154,575 (0.000087) (114,486)
Discontinued operations basic and diluted EPS 162,945 1,179,441,929 0.000138 (283,172)
In the current year the Group has made a loss and the potential
share options are therefore anti-dilutive.
Potential dilutive items 2012 2011 Weighted Weighted average average Number of Number of shares shares Loan note 1 (see note 18) 93,750,000 93,750,000 Loan note 2 (see note 18) 6,250,000 43,750,000 Share options (see note 20) 195,712,646 286,606,019 295,712,646 424,106,019
As the current year shows a loss, the other potential dilutive items
are anti-dilutive and therefore do not alter the EPS calculations.
9. PROPERTY, PLANT AND EQUIPMENT
Short Office and leasehold Fixtures and computer Group improvements fittings equipment Total [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] Cost At 1 October 2010 415,575 52,992 927,686 1,396,253 Additions - 1,155 35,819 36,974 Disposals - - - - Currency exchange adjustment 4,893 408 11,606 16,907 At 1 October 2011 420,468 54,555 975,111 1,450,134 Additions 2,157 886 51,938 54,981 Disposals - (4,987) (23,046) (28,033) Currency exchange adjustment (14,074) (957) (32,278) (47,309) At 30 September 2012 408,551 49,497 971,725 1,429,773 Accumulated depreciation At 1 October 2010 172,490 42,981 799,303 1,014,774 Provided in the year 27,972 5,633 77,565 111,170 Disposals - - - - Currency exchange adjustment 2,812 400 11,318 14,530 At 1 October 2011 203,274 49,014 888,186 1,140,474 Provided in the year 26,342 4,865 62,633 93,840 Disposals - (4,987) (17,048) (22,035) Currency exchange adjustment (7,430) (935) (29,930) (38,295) At 30 September 2012 222,186 47,957 903,841 1,173,984 Net Book Value At 30 September 2012 186,365 1,540 67,884 255,789 At 30 September 2011 217,194 5,541 86,925 309,660 At 30 September 2010 243,085 10,011 128,383 381,479
Included in the total net book value of [pounds sterling]255,789 is
[pounds sterling]78,718 (2011: [pounds sterling]128,522) in respect of
assets held under hire purchase agreements. The categories of these
assets are short
improvements of [pounds sterling]48,716 and
computer and office equipment of [pounds sterling]30,002.
The depreciation charged to the Income Statement in the year in
respect of such assets is [pounds sterling]51,103 (short leasehold
improvements of [pounds sterling]4,117 and computer and office equipment
of [pounds sterling]46,986 (2011: [pounds sterling]70,261).
The Company had no property, plant and equipment.
10. goodwill Goodwill on Purchased Group consolidation Goodwill Total [pounds sterling] [pounds sterling] [pounds sterling] Cost At 1 October 2010 641,137 661,025 1,302,162 Currency exchange - 7,785 7,785 adjustment Additions - - - Disposals - - - At 1 October 2011 641,137 668,810 1,309,947 Disposals - (668,810) (668,810) At 30 September 2012 641,137 - 641,137 Impairment At 1 October 2010 641,137 - 641,137 Impairment charge - - - Disposal - - - At 1 October 2011 641,137 - 641,137 At 30 September 2012 641,137 - 641,137 Net book value At 30 September 2012 - - - At 30 September 2011 - 668,810 668,810 At 30 September 2010 - 661,025 661,025 Group 2012 2011 Resilience Technology Corporation - 668,810 - 668,810 11. INTANGIBLE ASSETS Customer Group List Total [pounds sterling] [pounds sterling] Cost At 1 October 2010 1,072,555 1,072,555 Currency exchange 10,628 10,628 adjustment Additions Disposals - - At 1 October 2011 1,083,183 1,083,183 Currency exchange - 10,628 adjustment Disposals (1,083,183) (1,083,183) At 30 September 2012 - - Amortisation At 1 October 2010 169,773 169,773 Currency exchange adjustment 7,881 7,881 Provided in the year 271,619 271,619 At 1 October 2011 449,273 449,273 Currency exchange adjustment - - Provided in the year 38,477 38,477 Disposals (487,750) (487,750) At 30 September 2012 - - Net book value At 30 September 2012 - - At 30 September 2011 633,910 633,910 At 30 September 2010 902,482 902,482 Group 2012 2011 [pounds sterling] [pounds sterling]
Resilience Technology Corporation – 633,910
12. non current ASSET INVESTMENTS
Group Available-for-sale investments Total [pounds sterling] [pounds sterling] At 1 October 2010 - - Additions - - Exchange adjustments - - Impairment of investment - - Transfer - - Revaluation - - At 1 October 2011 - - Additions - - Exchange adjustments - - Impairment of investment - - At 30 September 2012 - - Available-for- Subsidiary sale Company Undertakings investments Total [pounds sterling] [pounds sterling] [pounds sterling] At 1 October 2010 362,220 - 362,220 At 1 October 2011 362,220 - 362,220 At 30 September 2012 362,220 - 362,220
The Company directly owns 100% of the issued share capital of the
following subsidiary undertakings, which have been included in the
consolidated financial statements:
Subsidiary undertaking Country of registration Principal activity
Enables IT (UK) Limited
England and Wales
IT Support services FixIT Worldwide Limited England and Wales IT Support services PC Medics Group Limited England and Wales Holding Company Nexus Management Inc * USA IT Support services
* Investment held via PC
n. 1. Science of medicine.
The Company owned 14.78% of the ordinary issued share capital of PD Financial, a company incorporated in the USA, as at 30 September 2012. PD Financial's principal activity is direct marketing. PD Financial has now ceased actively trading. In the directors' opinion this investment currently has no value. 13. INVENTORIES Group 2012 2011 [pounds sterling] [pounds sterling] Raw Materials - 301,837 DX Units - 111,104 Total Inventories - 412,941
All inventories were held by Resilience Technology Corporation and
were disposed of during the year ended 30 September 2012. Raw materials
recognised as cost of sales amounted to [pounds sterling]Nil (2011:
[pounds sterling]224,405). There has been no write down of inventories
to net realisable value in 2012 (2011: [pounds sterling]Nil).
The company had no inventories at 30 September 2012.
14. TRADE AND OTHER RECEIVABLES
Group Company 2012 2011 2012 2011 [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] Trade receivables 122,663 268,276 - 25,125
Amounts owed by Group undertakings – – 480,446 2,326,537
See value-added tax (VAT).
- - 27,265 3,641 Other receivables 91,024 25,130 - -
v. ac·crued, ac·cru·ing, ac·crues
1. To come to one as a gain, addition, or increment:
income 81,157 117,570 100,074 29,245
294,844 410,976 607,785 2,384,548
Included in the Company total above is [pounds sterling]480,446
(2011: [pounds sterling]2,326,537) relating to debtors due after more
than one year.
There is no material variance between carrying and fair values.
15. TRADE AND OTHER PAYABLES
Group Company 2012 2011 2012 2011 [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] Trade payables 60,039 830,325 22,679 12,503 Other payables 83,537 150,117 - -
and deferred income 555,385 840,869 501,071 42,916
698,961 1,821,311 523,750 55,419
Included within Other payables for the Group total above is [pounds
sterling]Nil (2011: [pounds sterling]68,688) relating to amounts falling
due after more than one year.
There is no material variance between carrying and fair values.
16. LOANS AND OTHER BORROWINGS
Group Company 2012 2011 2012 2011 [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] Bank loans - 59,200 - - Other loans 355,293 676,923 355,293 545,293 355,293 736,123 355,293 545,293 Disclosed within current liabilities - (206,362) -
tr.v. dis·closed, dis·clos·ing, dis·clos·es
1. To expose to view, as by removing a cover; uncover.
2. To make known (something heretofore kept secret).
as non-current liabilities 355,293 529,761 355,293
The borrowings are
v. re·paid , re·pay·ing, re·pays
1. To pay back:
Group Company 2012 2011 2012 2011 [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] On demand or within one year - 206,362 - 40,000
In the second to fifth years
355,293 529,761 355,293
355,293 736,123 355,293
Less: Amount due for settlement within 12 months (shown under current liabilities) - (206,362) - (40,000) Amount due for settlement after 12 months 355,293 529,761 355,293 505,293
Included within other loans is an amount of [pounds sterling]Nil
(2011: [pounds sterling]5,760) relating to the trade and asset
acquisition of Resilience Technology Corporation.
Bank overdrafts and loans are arranged at floating rates, exposing
the Group to cash flow interest rate risk.
The weighted average interest rates paid were as follows: 2012
% % Bank loans - 9.63
Sensitivity analysis on the level of interest rates has not been
undertaken as the Directors believe that any increase/decrease in
interest rates during the current and previous year would have had no
material impact on the level of interest payable.
The other principal features of the Group’s borrowings are as
The Group has two loans taken out in previous years.
(i) Convertible loan notes of [pounds sterling]375,000, convertible
no later than 2015. The rate of interest is 10% p.a.
(ii) Convertible loan notes of [pounds sterling]25,000, convertible
no later than 2015. The rate of interest is 10% p.a.
17. NET OBLIGATIONS UNDER FINANCE LEASES
Present value of lease Group Minimum lease payments payments 2012 2011 2012 2011 [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] Amounts payable under finance lease Within one year 44,824 70,383 44,824 70,383 In the second to fifth years inclusive 21,785 64,103 21,785 64,103 66,609 134,486 66,609 134,486 Less: Future finance charges (4,428) (12,484) (4,428) (12,484) Present value of lease obligations 62,181 122,002 62,181 122,002 Less: Amount due to settlement within 12 months (shown under current liabilities) (41,263) (61,806) (41,263) (61,806) Amount due to be settled after 12 months 20,918 60,196 20,918 60,196 Net obligations under finance leases contracts are secured on the assets concerned.
The main finance leases within the Group are:
Desktop PC’s and laptops for Nexus Management Inc. The lease,
which was for 32 replacement PC’s and laptops, commenced in 2012. A
monthly rental of [pounds sterling]194 is payable over 36 months, with
an option to purchase at a
amount after 36 months.
Addition to the "High availability virtual environment" (HAVEN) for Nexus Management Inc. The lease commenced in 2011. A monthly rental of [pounds sterling]1,601 is payable over 36 months, with an option to purchase at a nominal amount after 36 months. The "High availability virtual environment" contains five servers and storage units that house the virtual server. Nexus Management Inc. offer HAVEN as a remote storage or virtual server product to its clients.
virtual environment for Nexus Management Inc. The
lease commenced in 2010. A monthly rental of [pounds sterling]2,371 is
payable over 36 months, with an option to purchase at a nominal amount
after 36 months.
mechanical process for controlling the humidity, temperature, cleanliness, and circulation of air in buildings and rooms. Indoor air is conditioned and regulated to maintain the temperature-humidity ratio that is most comfortable and healthful.
system for Nexus Management Inc. The lease
commenced in 2009. A monthly rental of [pounds sterling]1,349 is payable
over 60 months, with an option to purchase at a nominal amount after 60
Amounts payable under finance leases in the company are [pounds sterling]nil (2011 [pounds sterling]nil). 18. SHARE CAPITAL Group Company 2012 2011 2012 2011 [pounds sterling] [pounds sterling] [pounds sterling] [pounds sterling] Authorised 4,000,000,000 (2011: 4,000,000,000) Ordinary shares of [pounds sterling]0.0025 each 10,000,000
10,000,000 10,000,000 10,000,000
Allotted, called up and fully paid 1,179,851,765 (2011:1,142,351,765) Ordinary shares of [pounds sterling]0.0025 2,949,630
2,855,880 2,949,630 2,855,880
Shares to be issued Nil (2011: Nil) Ordinary shares of [pounds sterling]0.0025 - - - - No. of [pounds sterling] shares
tr.v. al·lot·ted, al·lot·ting, al·lots
1. To parcel out; distribute or apportion:
, called up and fully paid
At 1 October 2011 1,142,351,765 2,855,880 Shares issued in the year: Consideration for acquisition 0.40p per share 37,500,000 93,750 At 30 September 2012 1,179,851,765 2,949,630 Share option schemes On 6 April 2001 the Company adopted an Enterprise Management Incentive Scheme. As set out below during the year the Company did not grant any options (2011: 16,500,000 options). Due to the value of these options or the tax status of the recipients, none of these options will be treated as if they were issued under an unapproved share option scheme. No provision is made for National Insurance on the options, which are exercisable at the balance sheet date due to a joint election in place between the Company and the individual under which the individual has agreed to take on the Company's National Insurance liability.
Details of the number of share options and the weighted average
exercise price (
) outstanding during the year are as follows:
2012 2011 WAEP WAEP Number Pence Number Pence Outstanding at the beginning of the year 286,606,019 0.63p 297,672,007 0.63p Granted during the year - 0.40p 16,500,000 0.40p Exercised during the year - - - - Lapsed during the year (90,893,373) 0.61p (27,565,988) 0.86p
Outstanding at the end of the year 195,712,646 0.63p 286,606,019
Exercisable at the end of the year 195,712,646 0.63p 266,272,686
The weighted average share price at the date of exercise for share
options exercised during the year was nil (2011: nil).
At 30 September 2012 the following options were granted but not
exercised. Options granted to the directors of the Company are detailed
3,850,000 options at 0.25p per share exercisable between 31/12/03
and 29/7/13 granted to P J Weller.
ii) 45,881,443 options at 0.6p per share exercisable between 2/8/04
and 1/2/14 granted. The options to directors
were as follows: P J Weller 1,666,667
iii) 9,016,394 options at 0.61p per share exercisable between 1/7/04
and 1/2/14 granted. The options to directors
were as follows: P J Weller 3,278,869
iv) 28,186,276 options at 0.68p per share exercisable between
9/12/04 and 8/6/14. The options to directors were
as follows: P J Weller 1,225,490
v) 1,376,148 options at 1.09p per share exercisable between 1/2/05
and 1/8/14 granted.
vi) 12,865,617 options at 0.75p per share exercisable between
1/10/05 and 17/5/15 granted.
vii) 2,380,953 options at 0.63p per share exercisable between
29/9/05 and 27/4/14 granted.
viii) 38,736,842 options at 0.59p per share exercisable between
18/11/05 and 17/5/15 The options to directors were
as follows: P J Weller 1,684,211
ix) 6,000,000 options at 0.49p per share exercisable between 31/5/06
and 31/5/15 granted. The options to
directors were as follows: P J Weller 2,400,000 x) 1,200,000 options at 0.64p per share exercisable
between 8/5/06 and 7/11/15 granted.
xi) 5,172,414 options at 0.58p per share exercisable
between 13/10/06 and 12/4/16 granted.
xii) 3,600,000 options at 0.63p per share exercisable
between 16/4/07 and 15/10/16 granted.
xii) 347,372 options at 0.75p per share exercisable between
16/4/07 and 15/10/16 granted.
xiv) 365,854 options at 1.64p per share exercisable between
1/8/07 and 31/1/17 granted.
5,100,000 options at 0.65p per share exercisable between 3/9/09 and 8/12/18 xv) granted. 10,000,000 options at 0.81p per share exercisable between 17/8/09 and 16/2/19 xvi) granted to P J Weller. xvii) 13,333,333 options at 0.81p per share exercisable
between 17/2/10 and 16/2/19
granted. The options to directors are as follows: P J Weller 10,000,000 xviii) 5,000,000 options at 0.40p per share exercisable
between 15/6/11 and 14/6/20 granted
3,300,000 options at 0.40p per share exercisable between 8/3/12 and 7/3/21 granted to P J xix) Weller.
The options outstanding at the end of the year have a range of
exercise prices from 0.25p to 1.09p. The estimate fair values of options
granted since 30 July 2003 were calculated using the Black-Scholes
A mathematical formula for determining the price at which an option should trade. The model expresses the value of an option as a function of the value of the underlying asset, length of time until maturity, exercise price, yields on
with the following inputs and subsequent
Grant date 30 Jul 03 02 Feb 04 02 Feb 04 09 Jun 04 02 Aug 04 28 Apr 05 Share price at grant date 0.0025 0.0053 0.0053 0.0059 0.0095 0.0055 Exercise price 0.0025 0.0060 0.0061 0.0068 0.0109 0.0063 Number of employees 3 7 7 6 3 3 Shares under option 3,850,000 45,881,443 9,016,394 28,186,276 1,376,148 2,380,953 Vesting period (years) 0.5 0.5 0.5 0.5 0.5 0.5 Expected volatility 85% 85% 85% 85% 85% 78% Option life (years) 10 10 10 10 10 10 Expected life (years) 10 10 10 10 10 10 Risk free rates 4.60% 4.60% 4.60% 4.60% 4.60% 4.60% Expected dividends - - - - - - Fair value per option 0.0016 0.0034 0.0034 0.0038 0.0061 0.0034 Grant date 18 May 05 18 May 05 31 May 05 08 Nov 05 13 Apr 06 16 Oct 06 Share price at grant date 0.0048 0.0048 0.0043 0.0056 0.0050 0.0063 Exercise price 0.0075 0.0059 0.0049 0.0064 0.0058 0.0063 Number of employees 40 6 9 5 3 3 Shares under option 12,865,617 38,736,842 6,000,000 1,200,000 5,172,414 2,400,000 Vesting period (years) 3 0.5 3 3 0.5 0.5 Expected volatility 78% 78% 78% 78% 78% 78% Option life (years) 10 10 10 10 10 10 Expected life (years) 10 10 10 10 10 10 Risk free rates 4.60% 4.60% 4.60% 4.60% 4.60% 4.60% Expected dividends - - - - - - Fair value per option 0.0028 0.0029 0.0026 0.0034 0.0031 0.0039 Grant date 16 Oct 06 16 Oct 06 01 Feb 07 09 Dec 08 17 Feb 09 17 Feb 09 Share price at grant date 0.0063 0.0063 0.0164 0.0056 0.0081 0.0081 Exercise price 0.0063 0.0075 0.0164 0.0065 0.0081 0.0081 Number of employees 2 1 2 7 3 3 Shares under option 1,200,000 347,372 365,854 5,100,000 10,000,000 13,333,333 Vesting period (years) 3 3 3 3 0.5 3 Expected volatility 79% 77% 79% 66% 65% 65% Option life (years) 10 10 10 10 10 10 Expected life (years) 10 10 10 10 10 10 Risk free rates 4.60% 4.60% 4.60% 4.50% 4.50% 4.50% Expected dividends - - - - - - Fair value per option 0.0039 0.0038 0.0103 0.0031 0.0046 0.0046 Grant date 15 Jun 10 8 Mar 11 Share price at grant date 0.0030 0.0033 Exercise price 0.0040 0.0040 Number of employees 7 5 Shares under option 5,000,000 3,300,000 Vesting period (years) 3 3 Expected volatility 65% 47% Option life (years) 10 10 Expected life (years) 10 10 Risk free rates 2.50% 2.50% Expected dividends - - Fair value per option 0.0015 0.0013
No other conditions were included in the fair value
The expected volatility is based on historical volatility over the expected life period. The expected life of the average expected period to exercise based on historical experience. The risk free rate of return is the yield on zero-coupon UK government bonds of a term consistent with the assumed option life.
19. POST BALANCE SHEET EVENTS
In November 2012, the company consolidated its shares at a ratio of 300:1 and a division of the existing ordinary shares of [pounds sterling]0.0025 in the capital of the Company into new ordinary shares of [pounds sterling]0.01 each and deferred shares of [pounds sterling]0.74 each in the capital of the Company. In November 2012, the Group completed the acquisition of Enables IT Limited for [pounds sterling]4.25 million consideration, which was satisfied by the issue of 11,798,475 consideration shares. The Group acquired 100% of the share capital of Enables IT Limited. The acquisition constitutes a reverse takeover under the AIM rules. The legal name of the company was changed to Enables IT Group plc. 20. DIVIDEND
The Directors have not recommended a dividend.
21. COPIES OF THE REPORT & ACCOUNTS
Copies of the Report and Accounts will be posted to shareholders
shortly, will be available from the Company’s registered office
Unit 5 Mole Business Park, Randalls Road,
county (1991 pop. 997,000), 653 sq mi (1,691 sq km), SE England. The county seat is Guildford. The North Downs cross the county from east to west. To the north the land slopes gently downward to the Thames, into which flow the Wey and the Mole, Surrey’s
and will be available from the Company’s website www.enablesit.com.